Morgan Stanley rebels gain ground

EIGHT former Morgan Stanley bankers have stepped up their campaign to oust Philip Purcell, the chairman and chief executive.

In an advertisement in The Wall Street Journal, the rebel shareholders accuse the bank of silencing critics with a climate of fear.

They also attack Purcell's management shake-up last week which saw president Stephen Newhouse quit after he was replaced by co-presidents Zoe Cruz and Stephen Crawford.

The rebels said it raised 'troubling questions about the leadership, governance and direction of the firm'.

Purcell defended his position in a letter to staff on April 1. 'I do not believe it is in the custom of Morgan Stanley for any member of this firm - current or past - to risk a course of action that would damage our franchise,' he said.

French luxury goods group LVMH demanded another £128m in damages from Morgan Stanley after successfully suing it for publishing damaging research last year.